Foley on Microsoft

Microsoft to Reboot Mobile Windows Strategy, Again

• By Mary Jo Foley
• 10/01/2015

October is shaping up to be a busy month for Microsoft. The company is on tap to launch -- but not necessarily ship -- a bunch of new hardware devices this month. But even more important, Microsoft will kick off of its newest Windows mobility strategy.

Yes, I know CEO Satya Nadella has said there's been no change to Microsoft's mobility vision and strategy. But I, and many other Microsoft watchers, beg to differ.

A quick rant: I often see other pundits and frustrated customers and developers castigating Microsoft for not having done enough to grow the Windows Phone share. Microsoft tried offering carrier reps incentives, including free Xboxes. The company offered to defray the costs of developing some Windows Phone apps via proof-of-concept schemes. I heard some high-level Microsoft execs went into stores on their own time to demo Windows Phone devices and answer questions. Nothing worked. Microsoft was late to the market and couldn't unseat Android and iOS. But it wasn't for lack of trying.

Microsoft's new approach is multi-faceted. First, Nadella & Co. are changing the "operating approach" for Windows Phone. Instead of focusing almost exclusively on the low end of the market with hundreds of barely differentiated, cheap Windows Phone-based devices, Microsoft is now planning to field a maximum of six new Windows Phone-based models each year in three categories: Flagship, business, and value. As part of this new focus, Microsoft is expected to trim its number of mobile operators, as well as the number of countries it's targeting, leaving the less receptive ones behind. (I'm nervously betting that includes Verizon, which is my carrier and has never shown any enthusiasm for Windows Phone.)

Microsoft will build Lumia devices, whether or not any other phone makers continue to do so, Nadella told me. He didn't say how long that would be the case, and many company watchers predict he won't continue to throw money at Windows Phone devices for more than a year if they don't gain ground.

Second, Microsoft is seeking to redefine the "Windows mobile" market. Currently, most of us equate mobile with phones. But Microsoft is encouraging developers and customers to think more broadly about the Windows mobile ecosystem.

The new slogan -- mine, not Microsoft's -- is Windows mobile doesn't equal Windows Mobile. The Windows mobile market includes Windows Phone-based smartphones, Windows tablets (Surfaces and other OEM-made products), Windows laptops, the Microsoft Band and the coming HoloLens augmented-reality goggles, Microsoft insists. This broader playing field will be more attractive to developers than the small and struggling Windows Phone one on its own, the ‘Softies reason. And given that broader definition, the expected big-bang Microsoft hardware launch this month makes a lot of sense.

Microsoft also is looking to play to its particular strengths in the mobile space rather than continuing to try to go head-to-head with Android and iOS by just competing on price. The criteria Nadella is using to judge whether to bring a new Windows mobile device to market is differentiation.

Adding Continuum, the Microsoft technology that enables smoother switching between PCs and tablets, to Windows 10 Mobile, is one example of how Microsoft is attempting to differentiate. Continuum on Windows Phone devices will allow users to connect displays, mice and keyboards to their phones and use their phone applications on bigger screens. The inclusion of a pen with one of the new premium Lumia phones that Microsoft is expected to bring to market later this year is another.

While making and selling hardware isn't Priority No. 1 for the software-and-services-focused Microsoft, Nadella and team still want to make money from hardware if at all possible. The success of the Surface Pro family has shown it can be done when Microsoft sticks to its business-first mantra.

Will Microsoft be able to maintain a toehold, if not a full foot, in the mobility space with its new approach? We'll see as new devices and new Windows capabilities to support them arrive in the coming months.